Asian stocks saw a rise on Thursday, with a particular focus on technology shares following an impressive overnight performance by Nvidia. The regional technology stocks followed the lead of their U.S. counterparts as NVIDIA Corporation’s CEO emphasized strong demand for artificial intelligence, particularly benefiting chipmakers.
Japan’s Nikkei 225 and TOPIX indexes were the top performers in Asia, experiencing significant gains ranging between 2% and 3%. This surge in Japanese stocks coincided with a softer-than-expected reading on producer price index inflation for August. This reading contradicted recent hawkish signals from the Bank of Japan (BOJ) officials, suggesting that any further interest rate hikes by the central bank might be delayed.
As Japan prepares for the upcoming BOJ policy meeting, the market is divided on the potential outcome. The recent weaker inflation data has alleviated some of the pressure on the central bank to raise rates in the short term. With BOJ board member Naoki Tamura advocating for at least a 1% interest rate to counter inflation risks, the decision at the upcoming meeting remains uncertain.
Apart from Japan, other tech-heavy markets in Asia also experienced gains. South Korea’s KOSPI rose by 1.2%, while Taiwan’s TSMC surged by 4.7%, boosting the Taiwan Weighted index. The rally in tech stocks was further supported by an over 8% increase in Nvidia’s stock price, with suppliers like SK Hynix and Advantest following suit with significant gains.
However, the positive momentum seen in tech stocks was not replicated across all Asian markets. Australia’s ASX 200 saw modest gains, while India’s Nifty 50 index futures hinted at a lukewarm opening following a retreat in the index the previous day. The Shanghai Shenzhen CSI 300 and Shanghai Composite indexes in China, as well as Hong Kong’s Hang Seng, experienced lackluster performance, moving within a flat-to-low range.
While technology stocks have been the driving force behind the rise in Asian markets, the softer inflation data in Japan has injected a degree of uncertainty into the region’s financial landscape. As markets await the upcoming BOJ policy meeting and assess the impact of global economic conditions on tech valuations, the Asian markets are poised for a period of cautious optimism.